10 September 2012Crystal Towers, Century City.

Cape Town

Five Years of Protecting Intellectual Property Rights in ZA:

Lessons Learned to date

Charles WebsterSpoor & Fisher

• A-Z of the ADR process• Trends• Lessons learned

Outline:

A is forAlternative Dispute Resolution

Alternative Dispute Resolution

• Not your usual judicial process

• But similar to other Intellectual Property issues

– Trade mark oppositions– Close corporation name objections (under 1973

Act)

• High Court infringement proceedings

B is forBalance of Probabilities

Balance of Probabilities

Reg 3 (2): The Complainant is required to prove on a balance of probabilities to the adjudicator that the required elements in subreg (1) are present.

C is forComplainant

D is for

Domain Name Disputes

The registration of a domain name may lead to a dispute and three possible decisions may arise:

• Refusal of the dispute or the transfer of the name to the complainant (for abusive registrations)

• Refusal of the dispute or the deletion and prohibition of the domain name (for offensive registrations)

• Refusal of the dispute as the dispute constitutes reverse domain name hi-jacking.

E is forElectronic Communications and Transactions Act 25 of 2002

Electronic Communications and Transactions Act 25 of 2002

The Alternative Dispute Resolution Regulations published in Government Gazette no. 29405 of 22 November 2006 under Section 69 read with Section 94 of the Act

F is forFactors

Factors

• Which may indicate that a domain name is an abusive registration (Reg 4(1))

• Which may indicate that a domain name is not an abusive registration (Reg 5).

List not exhaustive

G is forGeneric

Generic

Where the domain name is • used generically; or • in a descriptive manner; and • the registrant is making fair use of it, these are factors which may indicate that the domain name is not an abusive registration (Reg 5(b)).

mr.plastic.co.za ZA 2007-0001va.co.za ZA 2011-0098

H is forHatred

Hatred

An offensive registration may be indicated if the domain name advocates hatred that is based on race, ethnicity, gender or religion and/or that constitutes incitement to cause harm (Reg 4(2)).

I is forIP rights

IP rights

“Rights” and “registered rights” include • intellectual property rights, • commercial, • cultural, • linguistic, • religious and personal rights protected under South African law, but is not limited thereto.

J is forJudgment of the High Court

Judgment of the High Court

Reg 11(4) provides that if the second level domain administrator learns that legal action has commenced, it may not implement the adjudicator’s decision, and the second level domain administrator must not take further action until it receives – • Proof of a resolution or settlement between the

parties;• Proof that the lawsuit has been dismissed or

withdrawn; or• A copy of a Court order

K is for R10K and R24K

R10K and R24K

A complainant must pay • R10 000 for one adjudicator (Reg 34(1))• R24 000 for three adjudicators (Reg 34 (1))• R24 000 appeal fee (Reg 34 (3))

L is forLegitimate

Legitimate

Where the registrant has been • commonly known by the name; or • legitimately connected with a mark • which is identical or similar to the domain name

(Reg 5(a)(ii)); or • made legitimate non-commercial or fair use of the

domain name (Reg 5(a)(iii)) these are factors which may indicate that the domain name is not an abusive registration.

M is forMores

Mores

Offensive registration• contrary to law• contra bonos mores• likely to give offence to any class of persons

N is forNational Decisions

National Decisions

Reg 13(1) dealing with precedent provides that an adjudicator must be guided by • previous decisions made in terms of the Regulations

(national decisions), and • decisions by foreign dispute resolution providers.

O is forOffensive

Offensive

Reg 4(2) provides that an offensive registration may be indicated if the domain name advocates hatred that is based on race, ethnicity, gender or religion and/or that constitutes incitement to cause harm.

P is forProcedure

Procedure

Procedure means the procedural rules in terms of which a dispute is to be conducted as set out in chapter III.

Q is forQueue

Queue

There are 48 active adjudicators queuing up for an opportunity to adjudicate in a dispute. The most prolific adjudicators are:• Owen Salmon (21)• André van der Merwe (12)• Gavin Morley (10)

R is forRegistrant

S is forSecond Level Domain Administrator

Second Level Domain Administrator

The entity licenced, or to be licensed by the Authority to operate as a second level domain in the .za domain name space.

T is forTransfer of the Domain Name

Transfer of the Domain Name

• Reg 9(a): Disputed name is transferred in successful abusive registration complaint

• Reg 12: May not transfer name while dispute pending

U is forUnfair advantage

Unfair advantage

Criteria for abusive registration include:• Took/takes unfair advantage• Was/is unfairly detrimental

V is forValuable Consideration

Valuable Consideration

Abusive registration if name acquired primarily to sell for price in excess of out of pocket expenses.

W is forWhois Database

X is forXnets.co.za ZA2011-0077

XNETS

Y is forWhy do we have ADR regulations?

Z is forTo protect .za domain names

.co.za

Reg 2(2): Only Internet domain names registered in the .co.za second level domain are covered by regulations.

Trends

2007 2008 2009 2010 2011 201205

1015202530354045

Cases Filed per Year

Cases Filed per Year

Total Cases Filed 115

Cases Settled 27 23.5%

Cases Pending 2 1.7%

Cases Decided 86 74.89%

Cases Appealed 6 5%

Trends

Trends

Legal Counsel

Complainant represented 108 81.2%

Registrant represented 25 18.8%

Trends

Cases Opposed 39 46.4% of cases decided

Cases Unopposed 45 53.6% of cases decided

Successful Disputes 68 82.9% of cases decided

Unsuccessful Disputes 45 17.1% of cases decided

Trends

Successful Disputes

Opposed cases (transfer) 25 67.6% of opposed cases

Unopposed cases (transfer) 45 100% of unopposed cases

Unsuccessful Disputes

Opposed cases (refused) 12 32.4% of opposed cases

Unopposed cases (refused) 0 0% of unopposed cases

Abusive registration - 3 requirementsComplainant must prove each of the following:1. that it has rights in respect of a name or mark,2. which is identical or similar to the domain name,

and3. in the hands of the registrant the domain name is

an abusive registration

All disputes thus far based on alleged abuse

Regulation 3(1)

(Reg 3(2): offensive registration)

Lessons Learned:

Relevant date: rights

• right at date of complaint• not registration date of domain name• but timing relevant to legitimate interest and bad

faith

mixit.co.za ZA2008-0020

• Threshold is fairly low• Main point is complainant must have proper interest • “rights” not trammeled by trade mark jurisprudence

– nutri-ag.co.za ZA2011-0102– xnets.co.za ZA2011-0077– seido.co.za ZA2009-0030

• Rights can be obtained in a two letter mark (but addition of one or more characters may then distinguish)– va.co.za ZA2011-0098

Rights

Examples of recent cases where no rights established:

• thelittleblackbook.co.za ZA2011-0103- complainant mere licensee

• nyama-spitbraai.co.za ZA2011-0092- nyama means meat: Zulu- lack of evidence of reputation / secondary meaning

• outsource.co.za ZA2011-0070- outsource is descriptive- trade marks and company names incorporating “outsource” not enough - lack of evidence of reputation

• privatesale.co.za ZA2007-0008- complainant’s private-sale.co.za comprise two hyphenated words both of which describe aspects of relevant business- lack of evidence of reputation

• weskusmall.co.za ZA2009-0029- no evidence of use- “West Coast” (Weskus) is a geographical indicator

Other examples of cases where no rights established:

But see:• mares.co.za ZA2008-0016

Complainant a distributor- cannot claim proprietary rights to marks- can claim commercial rights pursuant to the distribution agreementabusive factors compared against complainant’s rights

(as distributor) and dispute refused.

• va.co.za ZA2011-0098- sufficient rights in V&A for locus standi- rights limited in scope (with consequences)

Abusive registration - definition

A domain name which either:• was registered or otherwise acquired in a manner • at the time when registration took place• took unfair advantage of, or was unfairly detrimental

to the complainant’s rights, or• has been used in a manner • that takes unfair advantage of, or is unfairly

detrimental to the complainant’s rights

Regulation (1)(b)

• Registration can be abusive “now” although not “then”

• Can become abusive depending on use• Potential for “bait and switch” is sufficient to

constitute abuse whether in fact effected or not

xnets.co.za ZA2011-0077

Relevant date: abuse

Registered primarily to:• sell, rent or otherwise transfer• to a complainant or, complainant’s competitor or

third party• for valuable consideration in excess of reasonable

expenses

Regulation 4(1)(a)(i)

Abusive registration - factors

Valuable consideration in excess:

• sterkinikor.co.za ZA2012-0107- R204 000

• dedrego.co.za ZA2012-0110- R250 000

Even if no consideration quantified:

“We are the domain holder of the domain movingforward.co.za. We have been approached by a commercial party to sell this domain. Please let me know if Standard Bank is interested as we will otherwise proceed with the sale of this domain”

movingforward.co.za ZA2010-0050• Decision i.t.o. 4(1)(c) though (pattern of abusive

registrations)

Valuable consideration in excess:

Registered primarily to:

• block intentionally the registration of a name or a mark in which the complainant has rightsRegulation 4(1)(a)(ii)

• disrupt unfairly the business of the complainantRegulation 4(1)(a)(iii)

• prevent the complainant from exercising his, her or its rightsRegulation 4(1)(a)(iv)

Abusive registration - factors

Circumstances indicating that the registrant is using, or has registered, the domain name in a way that leads people or businesses to believe that the domain name is registered to, operated or authorised by, or otherwise connected with the complainant.

Regulation 4(1)(b)

Abusive registration - factors

• The registration of an identical domain name may raise presumption that registration is abusive

• Because impossible to infer that it was chosen for any reason other than to impersonate the complainant

fifa.co.za ZA2007-0007

Adverse inference

Where Registrant has adopted a domain name• to all intents and purposes identical to

Complainant’s rights• without any explanation for conduct• reasonable to infer that Registrant operating in

same field • registered domain name primarily to :

– disrupt unfairly the business, or– block intentionally, or– leads people to believe a connection

nutri-ag.co.za ZA2011-0102

Adverse inference

Evidence, in combination with other circumstances, indicating that the domain name in dispute is an abusive registration, that the registrant is engaged in a pattern of making abusive registrations.

Regulation 4(1)(c)

Abusive registration - factors

A Pattern

A further factor may be evidence of a pattern:

• elitemodel.co.za ZA2009-0032• ketelone.co.za ZA2009-0037• hackett.co.za ZA2009-0033• absapremiership.co.za ZA2009-0034

The “three strikes” rule may – or may not – operate in future

There shall be a rebuttable presumption of abusive registration if the complainant proves that the registrant has been found to have made an abusive registration in three or more disputes in the 12 months before the dispute was filed.

Regulation 4(3)

Abusive registration - factors

Digital Orange / Joris Kroner

19 February 2010: peroni.co.za ZA2009-0038

Three strikes rule applied:• hackett.co.za 10 September 2009• absapremiership.co.za 20 September 2009• ketelone.co.za 15 December 2009and again in googleadsense ZA2010-0055

False or incomplete contact details provided by the registrant in the whois database

Regulation 4 (1)(d)

sterkinikor.co.za ZA2012-0107

Abusive registration - factors

The circumstance that the domain name was registered as a result of a relationship between the complainant and the registrant, and the complainant has• been using the domain name registration

exclusively; and• paid for the registration or renewal of the domain

name registration.

Regulation 4(1)(e)

Abusive registration - factors

Before being aware of the complainant’s cause for complaint, the registrant hasi. used or made demonstrable preparations to use

the domain name in connection with a good faith offering of goods or services;

ii. been commonly known by the name or legitimately connected with a mark which is identical or similar to the domain name; or

iii. made legitimate non-commercial or fair use of the domain name.

Regulation 5(a)

Not an Abusive registration - factors

The domain name is used generically or in a descriptive manner and the registrant is making fair use of it.

Regulation 5(b)

Not an Abusive registration - factors

That the registrant has demonstrated fair use, which use may include websites operated solely in tribute to or fair criticism of a person or business: provided that the burden of proof shifts to the registrant to show that the domain name is not an abusive registration if the domain name (not including the first and second suffixes) is identical to the mark in which the complainant asserts rights, without any addition.

Regulation 5(c)

Not an Abusive registration - factors

mr.plastic.co.za ZA2007-0001

va.co.za ZA2011-0098

Lessons Learned:

chore-timebrock.co.za ZA2012-0112sterkinikor.co.za ZA2012-0107picknpayhypermarket.co.za ZA2011-0101 (settled)bakubunglodge.co.za ZA2011-0093

Lessons Learned:

QUESTIONS?

Charles Webster(012) 676 1279

c.webster@spoor.com